France, Germany, Italy, Spain seek tax on digital giants' revenues

France, Germany, Italy and Spain want digital
multinationals like Amazon and Google to be taxed in Europe based on
their revenues, rather than only profits as now, their finance ministers
said in a joint letter.

France is leading a
push to clamp down on the taxation of such companies, but has found
support from other countries also frustrated at the low tax they receive
under current international rules.

such companies are often taxed on profits booked by subsidiaries in
low-tax countries like Ireland even though the revenue originated from
other EU countries.

should no longer accept that these companies do business in Europe
while paying minimal amounts of tax to our treasuries,” the four
ministers wrote in a letter seen by Reuters.

letter, signed by French Finance Minister Bruno Le Maire, Wolfgang
Schaeuble of Germany, Pier-Carlo Padoan of Italy and Luis de Guindos,
was addressed to the EU’s Estonian presidency with the bloc’s executive
Commission in copy.

They urged the Commission to come up with a
solution creating an “equalization tax” on turnover that would bring
taxation to the level of corporate tax in the country where the revenue
was earned.

“The amounts raised would aim to
reflect some of what these companies should be paying in terms of
corporate tax,” the ministers said in the letter, first reported on by
the Financial Times.

Le Maire, Schaeuble,
Padoan and de Guindos of Spain said they wanted to present the issue to
other EU counterparts at a Sept. 15-16 meeting in Tallinn.

EU’s current Estonian presidency has scheduled a discussion at the
meeting about the concept of “permanent establishment”, with the aim of
making it possible to tax firms where they create value, not only where
they have their tax residence.

France has
stepped up pressure for EU tax rules after facing legal setbacks trying
to obtain payments for taxes on activities in the country.

French court ruled in July French court ruled that Google, now part of
Alphabet Inc, was not liable to pay 1.1 billion euros ($1.3 billion) in
back taxes because it had no “permanent establishment” in France and ran
its operations there from Ireland.

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